OTTAWA (CU)_Since March this year, Canada’s housing market has been showing signs of a slowdown in activity, despite a steady increase in house prices. However, in September, steadily improving economic conditions triggered the first monthly increase in home sales in six months, with a month-on-month growth of 0.9 per cent.
Now it appears that the sector is heating back up, as sales reached an annual record in October, following a temporary slowdown earlier this year. According data published by the Canadian Real Estate Association on Monday (15 Nov), home sales in October escalated to 8.6 per cent from the previous month, the biggest increase since July last year when Canada was emerging from its first Coronavirus lockdown. The data also shows that this was the second best October on record for sales, as benchmark prices also rose by 2.7 per cent month-on-month.
“After a summer where it looked like housing markets might be calming down a bit, October’s numbers suggest we might be moving back towards what we saw this spring, with regards to current market demand and supply conditions,” Cliff Stevenson, the chair of the Association, said in a press release accompanying the report.
Records also show that while the number of new listings in October also rose by 3.2 per cent, this was met with strong demand, meaning Canada still has less than 2 months of inventory available.
Over the past year, historically low interest rates, together with growing demand for bigger living spaces amid the pandemic has redefined Canada’s housing market as one of the hottest in the world, triggering an affordability crisis, which took centre stage at the at the twentieth-September federal election. While Prime Minister Justin Trudeau has made it a top priority to address the supply shortage after winning a third consecutive mandate, local governments possess much of the power over housing policy, who have limited the speed with which the issue can be addressed.
